Media Release: MITCHAM-FRANKSTON FREEWAY MUST BE TOLLED: PREMIER

FROM THE OFFICE OF THE PREMIER

DATE: Monday, April 14, 2003

MITCHAM-FRANKSTON FREEWAY MUST BE TOLLED: PREMIER

A significant increase in unavoidable pressures on the Victorian Budget had forced the State Government to impose a toll to fund the Mitcham-Frankston Freeway, Premier Steve Bracks said today.

Mr Bracks revealed the single biggest pressure was around $1 billion extra needed over the next five years to keep the privatised public transport system from collapsing.

“One of the great strengths of this Government is its commitment to sound financial management,” Mr Bracks said.

“Since the last Budget – and the election – a number of issues beyond the Government’s control have emerged and put extraordinary pressure on Victoria’s strong economic position.

“The failure of the privatised public transport experiment – which resulted in the withdrawal of private transport operator National Express – has now left a $1 billion bill.

“We have also seen the worst bushfires in Victoria’s history, the continued deterioration in international markets, a worsening drought, and the impact of the Iraq conflict on the world economy.

“Since early this year at least an extra $350 million has had to be written down from the 2002-03 surplus due to the continued poor performance of international markets.

“The decision we have been forced to make to impose tolls is a difficult one – but it is the right one to protect the bottom line of the Budget.

“It will allow the Government to get on with the job of delivering on our election commitments to improve the health and education systems, protect the environment, and deliver infrastructure across the whole of the State.

“And it means the Victorian Budget will be one of the few in Australia – and around the world – to remain in surplus.”

The Premier said the Government had repeatedly made it very clear that the Budget faced significant pressures due to a range of external factors.

“There is no additional capacity to meet those challenges and still fund $1 billion to secure the transport system and $1.4 billion to fund a major new road.”

Mr Bracks said the true cost of keeping the public system afloat since the withdrawal of National Express in December had only been quantified in recent weeks.

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“National Express walked away from their contractual obligations citing losses of hundreds of millions of dollars due to the failure of the privatisation contracts.

“While there is no doubt the system operates better in terms of punctuality and reliability than when it was in public ownership, the level of ongoing Government subsidies was grossly insufficient to ensure commercial viability.

“Treasury has now confirmed that the viability of the public transport system depends on an increase in the Government subsidy of around $1 billion over the next five years alone.

“These costs are unavoidable if Victorians are to have an efficient public transport system.

“The Government faced a very difficult choice between keeping our promise on tolls – and delivering on our commitment to major improvements to the health and education systems as well as protecting Victoria’s environment for future generations.

“We have acted responsibly and accepted the reality of dramatically changed circumstances. These new demands require a new solution,” he said.

Mr Bracks said the Mitcham-Frankston Freeway was of enormous economic and social importance to the eastern and south-eastern suburbs.

“The Government’s decision means the freeway will go ahead – and will proceed on time and be completed by the end of 2008.”

Mr Bracks said the Government had rejected the Liberal Government’s model of tolling which was based on tolling existing roads and closing roads to force people on the tollway.

“No existing road will incur a toll, and no roads will be closed – unlike on the Tullamarine Freeway, motorists will still have the option of using the old route without a toll,” he said.

Mr Bracks said he had informed the Prime Minister of the Government’s decision and called on him to commit to half of the $200 million of Government funding still required to contribute to the project.

“A shared contribution of $200 million will help reduce the cost of the toll,” Mr Bracks said.

“I have also asked the Prime Minister to confirm that the remaining $345 million of the original federal contribution to the project will be redirected to other road projects in Victoria.”

Mr Bracks said expressions of interest for the Mitcham-Frankston Freeway would be called next month.

(Attachments – fact sheet and map)

KEY FACTS ABOUT THE PROJECT

The Mitcham-Frankston Freeway will be a 40 kilometre link from Mitcham to Frankston, connecting Melbourne's eastern and south eastern suburbs.

It will connect major industrial areas to each other and to ports, and provides access to a major growth corridor in which 40% of Melbourne’s manufacturing and production activity is based.

It will provide safe and efficient access between three freeways:

· Eastern Freeway
· Monash Freeway
· Mornington Peninsula Freeway

The project is the amalgamation of the Eastern Freeway Tunnels Project and the Scoresby Freeway.

It will comprise twin 1.5 kilometre tunnels to protect the Mullum Mullum Creek and the high quality Chaim Court and Hillcrest bushlands, and includes a link to the Ringwood Bypass.

It will be one of Australia's largest ever urban freeways, and is a vital component of Victoria and Australia’s economic and social infrastructure. When completed the Freeway will remove considerable truck traffic from the local arterial road network thereby enhancing road safety and local amenity

More than 4900 jobs are expected to be generated during construction of the freeway; and more than 8100 after that through increased economic activity.

The project will be delivered through the Southern and Eastern Integrated Transport Authority.

Since the Bracks Government came to office, over $54 million has been spent on land acquisition and development of the project. A further $70 million is being spent on the extension of the Eastern Freeway to Park Road.

The entire Mitcham - Frankston freeway will be completed during 2008.

Expressions of Interest are expected to be called next month.

MAP OF THE MITCHAM-FRANKSTON FREEWAY